Duke Buys Gato Montes Solar Project - Analyst Blog


Duke Energy Renewables, a commercial business unit of Duke Energy Corporation , ( DUK ) has purchased a Gato Montes Solar Power Project from AstroSol Inc., bringing the total number of solar projects to five in Arizona.

Located within the University of Arizona's ("UA") Science and Technology Park (UA Tech Park) in Tucson, the project covering 38.5-acre land has an electric generation capacity of 6 megawatt ("MW"). The vis-solis LLC, the U.S. subsidiary of Solmotion, had begun construction of UA Tech Park in December 2011. However, AstroSol Inc. has received certification from the Border Environment Cooperation Commission and approval for a $12.3 million loan from the North American Development Bank for the construction of the project.

The Gato Montes Solar Power Project consists of 48,000 PV panels. The Gato Montes project uses solar photovoltaic (PV) thin-film and amorphous silicon technology. Under a 20-year agreement, Tucson Electric Power Company ("TEP"), a subsidiary of UNS Energy Corporation ( UNS ), will buy electricity generated from the project.

This is Duke's 12th wholly owned commercial solar project in the U.S. Of these 12 projects, five are based in Arizona, the southwestern region of the United States and seven in Carolina, the Southeastern United States.

The other four solar projects at Arizona include a 5 MW Ajo Solar Project, a 15 MW Bagdad Solar Project, a 1.5 MWDC Prescott Valley Solar Project and a 10 MW Black Mountain Solar Project at Mohave County. All others, except Black Mountain Solar Project, are already into service. Projects at Carolina include 1-MW Shelby Solar Project, the 1-MW Taylorsville Solar Project, the 1-MW Martins Creek Solar Project, and 5-MW Murfreesboro Solar Project and three 1-megawatt commercial solar projects located in or near the town of Murphy, N.C. at the southwestern corner of the state.

Focus of the states toward renewable energy resources would help them in meeting Renewable Portfolio Standards. Moreover, given the current pulse in the U.S market that favors sustainable green generation, we believe these projects would bode well for Duke Energy going forward.

Moreover, Duke Energy Corporation's U.S. electricity and gas operations spread over the Carolinas, Florida, Indiana, Kentucky and Ohio generate a relatively stable and growing earnings stream.

However, we remain concerned due to the present unfavorable macro backdrop, post sandy storm effects, predominantly fossil-fuel based generation assets, tepid demand for electricity, and pending regulatory cases. '

Like its peers American Electric Power Co. Inc. ( AEP ) and PG&E Corp. ( PCG ), Duke Energy maintains a long-term Neutral recommendation on the stock.

Charlotte, North Carolina-based Duke Energy is a diversified energy company with a portfolio of domestic and international, natural gas and electric, regulated and unregulated businesses, which supplies, delivers, and processes energy for customers in North America and selected international markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AEP , DUK , PCG , UNS



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